Share

Navca: Mixed-motive investments 'risk putting profit before purpose'

Navca: Mixed-motive investments 'risk putting profit before purpose'
News

Navca: Mixed-motive investments 'risk putting profit before purpose'1

Finance | Niki May Young | 13 Apr 2012

Navca has warned that charities creating an investment platform where investors in the charity are expecting a return, could be pressured into maximising profits for investors, rather than furthering the interests of the charity.

The umbrella body issued the warning as part of its recommendations to Lord Hodgson who is overseeing the review of the Charities Act 2006, and in reference to the Charity Commission's latest investment guidance which encourages mixed-motive investments. 

Welcoming the guidance in general, Navca said it is "much more cautious about investments where the charity is the recipient and the investor is expecting a profit from the investment". 

"There would be a real risk that charities would be pressured into maximising the return for investors rather than furthering the interests of charities," wrote Peter Horner, Navca policy officer and author of the recommendations.

Further, he advised that: "Such arrangements would need to be carefully managed, as there is a risk that they would undermine people's confidence in charities and make charities targets from unscrupulous investors."

The warning was just one of 11 recommendations by the membership body, which answered questions asked by Lord Hodgson's consultation, due to close for responses on Monday. 

Income thresholds

Navca used the opportunity to raise an issue that was not covered by the consultation - that of charities that have incomes above the threshold for registration with the Charity Commission, but have not yet registered.

Horner said: "It is difficult to ascertain the size of this group and because identifying this group would add to the number of charities that need to be regulated, there may not be an incentive to try to identify them and persuade them to register." 

But, he said, "it could still be the case that many of these are unaware of the need to register or that they are still subject to charity law, whether or not they are registered. Navca would advocate some research into the size of this issue and appropriate solutions".

He also said that those charities that are below the threshold should not be prevented from joining the register of charities, held and regulated by the Charity Commission.

Under current rules, charities with an income under £5,000 per year are not permitted to register with the Charity Commission and Lord Hodgson's review is looking at whether this threshold should be raised further.

Horner advised however that such organisations experience difficulties in increasing their income due to the lack of a registration number:

"Individuals, when approached for donations, ask for a charity number as proof that an organisation is a charity," he said.

"The majority of the general public will not be aware of the various complexities such as thresholds, excepted charities and exempted charities. For them the charity number is what they look for. In fact for clothing collections this is the identifier that has been promoted publicly."

He also said that organisations without a charity number may not be able to use certain online fundraising sites or access corporate funding.

"Raising thresholds would increase the numbers that this would apply to," he warned.

Following the call for evidence which closes on Monday, all responses to the Charities Act 2006 review will be assessed and a report is expected to be complete and put before Parliament before the summer recess in mid-July.

 

 

 

 

 

Jeremy Corner
Sauna operative
Peter Horner Fan Club
13 Apr 2012

Wow, Horner at his best! What a legend!!

But could I please ask that you use Mr Horner's photo in future? I was disappointed to click through to this story and not see him.

Best wishes

Jeremy Corner
Peter Horner Fan Club

Comments

[Cancel] | Reply to:

Close »

Community Standards

The civilsociety.co.uk community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear

Please:

  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

Homelessness charity unveils fundraising app that helps the charity locate rough sleepers

31 Mar 2015

A London-based homelessness charity has launched an app that uses geolocation technology to let people...

Charity Tax Group calls for further postponement of 20 per cent tax on direct mail fundraising

31 Mar 2015

The Charity Tax Group and the Direct Marketing Association have jointly called on the government to again...

Save the Children and RB launch programme to reduce child deaths from diarrhoea

30 Mar 2015

Save the Children and health and hygiene company RB have launched a programme as part of their ongoing...

Election campaigning rules take effect for purdah

1 Apr 2015

Now that Parliament has been dissolved ahead of the general election on 7 May, all charities must make...

CCNI closes investigation into governance concerns at animal charity

1 Apr 2015

The Charity Commission for Northern Ireland has closed a statutory inquiry which investigated concerns...

Tate Britain director to step down

1 Apr 2015

Penelope Curtis is stepping down from her role as director of Tate Britain in order to become the first...

Homelessness charity unveils fundraising app that helps the charity locate rough sleepers

31 Mar 2015

A London-based homelessness charity has launched an app that uses geolocation technology to let people...

Social media 'slacktivism' encourages people to donate, finds JustGiving report

18 Mar 2015

People who share a fundraising page on social media are four times more likely to donate than those who...

Samaritans closes Twitter monitoring app permanently

11 Mar 2015

Samaritans has confirmed that it has permanently closed its app that was designed to monitor people’s...

Join the discussion

 Twitter button

@CSFinance